Here's What To Expect From Home Inspector

REAL ESTATE NOTEBOOK

July 25, 1999|By Robert Bruss

Two weeks ago, I received a phone call from a man I'll call Joe at the Federal Trade Commission. We've met only once, about 10 years ago when he gave a speech about loan fraud to a real estate mortgage group. But over the years, we've talked on the phone many times about real estate issues.

Every time Joe calls, I worry I've violated some obscure federal law and will go to jail for the rest of my life. But his calls are always friendly, and we both learn from them.

This time, Joe phoned about his son who is buying a home. Joe asked good questions about home inspections, and I realized the answers to those questions might make an interesting article about professional home inspections.

When I bought my first property, more than 30 years ago, I should have had a home inspection. But in those days, there was no such thing as a professional home inspector. Home inspection is a relatively new business, arising about 10 years ago.

Only California, Oregon, Minnesota and Texas minimally regulate professional home inspectors. In those states, regulation is more like a registration system. Even I could probably qualify as a home inspector. Frankly, it is too easy to become a so-called professional home inspector by taking out a telephone book Yellow Pages ad. But there are many outstanding professional inspectors available.

Many have construction experience, such as retired contractors. I've also encountered ``quick-buck, fly-by-night'' home inspectors who shouldn't be allowed to hold a clipboard and a checklist.

Professional home inspectors realize most of their business comes from real estate agents' referrals. That means an inspector who wants repeat business should not be a ``deal killer.'' Yet, he or she must competently - and thoroughly - inspect each house; otherwise, the buyer who later discovers undisclosed defects will be in lawsuit-mode.

Agents' referrals to professional inspectors are good recommendations. However, ask for the inspector's credentials. If he or she is a retired contractor, that's good. If he or she was hired last week by a home inspection firm, that's not good.

Ask for the inspector's professional credentials. The best and toughest is the American Society of Home Inspectors. Members must pass exams and complete supervised home inspections. For names of members, call 1-800-743-2744 or check the local phone book under ``Building Inspections,'' or similar headings.

After the seller accepts the buyer's purchase offer, presuming it contains a professional inspection contingency clause, the buyer should hire and accompany the inspector. Of course, the seller and the realty agents are welcome too.

If the inspector discovers a defect that the seller hadn't disclosed to the buyer, trouble might develop. Most sellers quickly agree to pay for the cost of repairing discovered defects. However, if the seller won't repair or negotiate, the buyer can then cancel the sale and obtain a refund of his earnest money deposit.

When the home is being sold as-is, as many are, don't expect the seller to pay for any repairs. However, if the seller failed to disclose known defects, then it's time to negotiate.

Inspectors don't want to become known as deal killers because then they won't get more referrals from real estate agents. For this reason, some inspectors may tend to go easy on finding defects in a home being sold.

On the other hand, sellers should watch out for inspectors who are instructed by buyers to discover real or imagined defects.

Even the world's best home inspectors don't know everything. That's why they include disclaimers in their written reports, such as: ``The roof appears to be in fair condition, but consult a roofer for further details.'' These disclaimers can be annoying to home buyers, but they are reasonable.

When the buyer is present for the inspection, the inspector will probably explain why he cannot state the roof's condition exactly. If the buyer doesn't accompany the inspector, however, the buyer might conclude the roof is in horrible shape.

Few real estate agents discourage home buyers from including a professional inspection contingency clause in their purchase offer. For a fee of $200 to $400 per inspection, after the seller accepts the purchase offer, the buyer can obtain a thorough report on the home's condition. By accompanying the inspector, buyers can ask a lot of questions about defects the seller disclosed and any additional defects discovered by the professional inspector.